news bulletin - NFIFWI

CLIA - a new TrialCLIA, a new concept is on trial these days in themarketing circles of LIC of India. The term standsfor Chief Life Insurance Advisors. I have gonethrough the circular of the said scheme. Although itlooks to be very innovative scheme, but a carefulstudy of the concept reveals that it is an ill conceivedidea, which has been put on a trial, and it will resultin the production of the orphan agents.In fact the incentive scheme of the Developmentofficers, which looked to the management aslucrative, had always been the bone of contentionbetween the class of Development officers and theLIC management from the very inception of thisscheme. Throughout the world the selling of lifeinsurance products had been a very awesome taskand only those people who have special aptitude,knowledge and courage can sell it. Its selling requiresa special blend of people. The persons bringing inthe good life insurance business had always beenrewarded with good commission or incentives bythe organizations they represent. It is a worldwidephenomenon and the Development officers of LICof India are no exception to that. The managementof the LIC of India had been making a consciouseffort to do away with this class of employees bybrining in some new channels of marketing of thelife insurance products. The management hadforgotten that it is this class alone which isresponsible for its growth from Rs.450 Crores in1956 to Rs.7, 00,000 Crores today.In 1960 after 4 years of the nationalization of thelife insurance business and coming into being of LICof India the new Staff Regulations were introducedand a new Chapter III was also introduced that wasmeant specifically for the class of the Developmentofficers. This Chapter deals with the performanceof the development officers and all the nonperformerswere made answerable. The recruitmentof the development officers continued till 1974 andthen it was stopped for a new trial.The LIC management thought of the idea ofintroducing the new concepts of Career Agents andDirect Agents and subsequently the Rural CareerAgents to whom the LIC management started givingsome additional incentive besides the regularcommission. The special new CAB branches andDAB branches were opened in almost all the metrosto start with. But the schemes of CAB and DABdied its own death due to non-success of thescheme. The lack of proper supervision, which alonea development officer can provide, was the mainreason of the failure of the scheme of the DAB andCAB concepts. Later the DAB and CAB brancheswere converted into the regular branches.After a lapse of 6 years in 1980 the LIC thought ofthe idea to make the recruitment of the DevelopmentOfficers for the growth of the business, which wasalready showing the horizontal graph of the businessgrowth. Thereafter we saw a decade of growth andnormalcy prevailing with the regular recruitment ofthe Development Officers in the organization. Thisgrowth in the business also saw the growth in theearning of incentive bonus by the Developmentofficers. Thereafter the LIC management thoughtof the idea of curtailing the earnings of theDevelopment officers by taking some new steps.The first curtailment was in the shape of introducingthe discredit for the lapseation of the business alreadyintroduced. Then there was the conflict over thefact as to what was a rural business and what not.Then new instructions were issued for the lessercredit of the business done by the agents who hadlong standing or who were club members. Themanagement crippled this way the scheme ofincentive bonus and the class of Developmentofficers was the net looser. In fact all thesecurtailment were mainly responsible for the slowgrowth of the business activities and resentment inthe class particularly in the sphere of newrecruitment because we know that this sort ofactions cannot be said to be moral boosters for anyorganization particularly in the insurance sector.Today the LIC management has started feeling theheat of the achievements of the private life insurersin the country. The private life insurers have startedgrasping the handsome share of the life insurancebusiness in the country. Today the agency strengthof the private insurers jointly has surpassed the total15